Account Verification with a Zero Dollar Value authorization request
Posted on Tuesday, June 09, 2009
We've been getting a lot of questions about Visa's new Account Verification service. Hopefully this will help clear things up a little.
For years, card not present merchants (ecommerce, phone, fax, mail) have needed to verify a cardholder's information upon acceptance when there was a delay between collecting the credit card data and actually charging the card. For example, a merchant may collect the credit card information during the initial sign up process but offer a 30 day trial period before charging the card. In this situation, it's in the best interest of the merchant to verify the cardholder's information including the credit card number, expiration date, address and CVV value for accuracy and legitimacy. The only way of doing this today is by doing a $1.00 authorization (Visa refers to these as Ghost Authorizations). While the authorization does eventually expire, some banks will show the pending $1.00 authorization which leads to merchants inevitably getting support questions regarding an improper charge.
Visa's new Account Verification program is an alternative to the $1.00 authorization. With this program, a merchant will be able to do a Zero Dollar Value authorization request which can include Address Verification (AVS) and CVV verification. MasterCard has as similar verification process for card not present recurring billing merchants with a $1.00 'test transaction'. Visa is charging for this service but MasterCard is not.
Interestingly, according to Visa, the problem that merchants have was not the primary driver behind creating the Account Verification program. Visa is trying to eliminate $1.00 authorization request because it has a negative impact on cardholder spending. For those us who live in the space and deal with the shortcomings and problems caused by the $1.00 auth, we're pleased with the creation of the Account Verification product whether we (merchants and service providers) were considered or not.
Related posts:
Visa Misuse of Authorization
Comments
Brian said on Tuesday, June 09, 2009:
Any word on what the Visa pricing will be? It's kind of silly that we (merchants) have to pay higher interchange due to fraud and then pay again to prevent fraud with AVS/CVV verifications.
Bryan Johnson said on Thursday, June 11, 2009:
Brian - I believe that Visa has stated $.025 per verification request.
Nancy Parker said on Monday, January 25, 2010:
I have recently transferred my money from a large bank to a local community bank.
I have recurring monthly debits, and I am in the process of notifying different merchants of my new debit card information.
One of the merchants, Sony Online Entertainment, attempted to verify the validty of the debit card by submitting a zero $$ verifier. My bank, Butte Community Bank, declined to verify the card because they "do not accept zero $$ verifiers due to ranpant fraud issues". Sony Online Entertainment said they switched to zero $$ verifiers in compliance with changes made by VISA in 2009.
Butte Community Bank called Sony Online Entertainment on my behalf and verified the validty of the account and card, but SoE would not accept that, it said had to be done electronically. The bank asked SoE to submit a $1.00 verifier, SoE said they can't do that because they would not be in compliance with VISA requirements.
Neither will budge, and I am left in the middle, unable to use my debit card.
Can you please tell me if Butte Community Bank is correct in declining the zero $$ verifier? Or if there is something I can do!
Please HELP!!!
Sincerely,
Nancy L. Parker